Insurance Commission of Western Australia v Antony Leslie John Woodings as Liquidator of the Bell Group Ltd (in Liq) - [2017] WASC 122

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: INSURANCE COMMISSION OF WESTERN AUSTRALIA -v- ANTONY LESLIE JOHN WOODINGS AS LIQUIDATOR OF THE BELL GROUP LTD (IN LIQ) [2017] WASC 122

CORAM: PRITCHARD J

HEARD: 31 MARCH & 6 APRIL 2017

DELIVERED : 13 APRIL 2017

FILE NO/S: CIV 2666 of 2016

BETWEEN: INSURANCE COMMISSION OF WESTERN AUSTRALIA
Plaintiff
AND
ANTONY LESLIE JOHN WOODINGS AS LIQUIDATOR OF THE BELL GROUP LTD (IN LIQ) (ACN 008 666 993)
First Defendant
THE BELL GROUP LTD (IN LIQ) (ACN 008 666 993)
Second Defendant
ANTONY LESLIE JOHN WOODINGS AS LIQUIDATOR OF BELL GROUP FINANCE PTY LTD (IN LIQ) (ACN 009 165 182)
Third Defendant
BELL GROUP FINANCE PTY LTD (IN LIQ) (ACN 009 165 182)
Fourth Defendant
ANTONY LESLIE JOHN WOODINGS AS LIQUIDATOR OF BELL BROS PTY LTD (IN LIQ) (ACN 008 672 375)
Fifth Defendant
BELL BROS PTY LTD (IN LIQ) (ACN 008 672 375)
Sixth Defendant
ANTONY LESLIE JOHN WOODINGS AS PROVISIONAL LIQUIDATOR FOR WESTERN INTERSTATE PTY LTD (IN PROV LIQ) (ACN 000 224 395)
Seventh Defendant
WESTERN INTERSTATE PTY LTD (IN PROV LIQ) (ACN 000 224 395)
Eighth Defendant
GARRY JOHN TREVOR AS LIQUIDATOR OF BELL GROUP NV (IN LIQ) (ARBN 073 576 502)
Ninth Defendant
BELL GROUP NV
Tenth Defendant
LAW DEBENTURE TRUST CORPORATION PLC
Eleventh Defendant
COMMONWEALTH OF AUSTRALIA
Twelfth Defendant
WA GLENDINNING & ASSOCIATES PTY LTD (ACN 008 762 721)
Thirteenth Defendant

Catchwords:

Injunctions - Interlocutory injunction - Anti-suit injunction - Implied duty to co-operate - Implied duty of good faith - Where defendant's conduct in pursuing proceedings would undermine purpose of contract between the parties - Serious question to be tried - Balance of convenience

Legislation:

Nil

Result:

Application granted
Interlocutory injunction issued to restrain tenth defendant from continuing to prosecute claim in the Federal Court of Australia

Category: B

Representation:

Counsel:

Plaintiff:     Mr S G Finch SC & Mr I J M Ahmed (31 March 2017), Mr P D Evans (6 April 2017)
First Defendant              :     No appearance
Second Defendant         :     No appearance
Third Defendant            :     No appearance
Fourth Defendant           :     No appearance
Fifth Defendant              :     No appearance
Sixth Defendant             :     No appearance
Seventh Defendant         :     No appearance
Eighth Defendant           :     No appearance
Ninth Defendant             :     No appearance
Tenth Defendant            :     Mr A D'Arcy
Eleventh Defendant        :     No appearance
Twelfth Defendant         :     No appearance
Thirteenth Defendant      :     No appearance

Solicitors:

Plaintiff:     State Solicitor for Western Australia
First Defendant              :     No appearance
Second Defendant         :     No appearance
Third Defendant            :     No appearance
Fourth Defendant           :     No appearance
Fifth Defendant              :     No appearance
Sixth Defendant             :     No appearance
Seventh Defendant         :     No appearance
Eighth Defendant           :     No appearance
Ninth Defendant             :     No appearance
Tenth Defendant            :     Lipman Karas
Eleventh Defendant        :     No appearance
Twelfth Defendant         :     No appearance
Thirteenth Defendant      :     No appearance

Cases referred to in judgment:

Alstom Ltd v Yokogawa Australia Pty Ltd (No 7) [2012] SASC 49
Australis Media Holdings Pty Ltd v Telstra Corporation Ltd; Australis Media Holdings Pty Ltd v News Corporation Ltd (1998) 43 NSWLR 104
Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 76 ALR 633
Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169
CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345
Great Southern Loans Pty Ltd v Locator Group Pty Ltd [2005] NSWSC 438
Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd [2006] QCA 126
Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268
Marmax Investments Pty Ltd v RPR Maintenance Pty Ltd [2015] FCAFC 127; (2015) 237 FCR 534
McJannett v Daley [No 2] [2012] WASC 386 (S)
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105
National Australia Bank Ltd v Joyce [2012] WASC 224
Peters (WA) Ltd v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126
Rectron Australia BV v Lu [2014] NSWSC 1367
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596
Service Station Association Ltd v Berg Bennett & Associates Pty Ltd (1993) 45 FCR 84
Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21; (1931) 45 CLR 359
Stirling v Maitland & Boyd (1864) 122 ER 1043
Tote Tasmania Pty Ltd v Garrott [2008] TASSC 86; (2008) 17 Tas R 320
Wigand v Bachmann‑Bechtel Brewing Co (1918) 118 NE 618
WIN Corporation Pty Ltd v Nine Network Australia Pty Ltd [2016] NSWCA 297
Wolfe v Permanent Custodians Ltd [2013] VSCA 331

PRITCHARD J:
(These reasons were delivered orally, and have been edited from the transcript.)

I have decided to deliver these reasons for decision orally today, rather than to adopt the more usual approach, after reserving judgment, of publishing reasons for decision in writing. That is because my other commitments are such that it will not be possible to publish a written judgment in the immediate future, and it is desirable that the parties know the outcome of the present application as soon as possible, given that there is a significant hearing listed in the Federal Court later this month.
This is an application by the plaintiff, the Insurance Commission of Western Australia (ICWA), for an interlocutory injunction in the nature of an anti-suit injunction (the Application). The relief sought on the Application is to restrain the tenth defendant, Bell Group NV (BGNV) from taking any further step to prosecute or progress certain claims for declaratory relief ‑ namely those in prayers for relief 6 to 11 (the Relief) ‑ which it is pursuing in proceedings commenced in the Federal Court by an amended originating process in the action numbered WAD 191 of 2016 (the Federal Court proceedings).
The basis for the Application made by ICWA is that in pursuing the Relief, BGNV is acting in breach of contract, namely an implied obligation of co‑operation or of good faith.
ICWA has filed an undertaking as to damages in the usual terms in support of the Application.
BGNV opposes the Application.
For the reasons which follow, I will grant an interlocutory injunction restraining BGNV from prosecuting or progressing the Relief in the Federal Court proceedings, pending determination by this Court of the question whether an injunction should be granted to permanently restrain BGNV from pursuing the Relief.
In these reasons for decision, I deal with the following matters:
1.Factual background;
2.Principles applicable to the grant of an interlocutory injunction;
3.Whether there exists a serious question to be tried as to whether BGNV's pursuit of the Relief constitutes a breach of contract;
4.Balance of convenience considerations;
5.Other considerations relevant to the exercise of the discretion to grant interlocutory injunctive relief; and
6.Conclusion: Overall evaluation of the question whether a basis for the grant of an interlocutory injunction has been made out.

Factual background

Turning first to the factual background. The parties relied on affidavits sworn by Ms Angela Hamersley and Mr Scott Bruce Foreman. Counsel for Bell Group (UK) Holdings Ltd (in liquidation) (BGUK) sought, and was granted, leave to appear, to make submissions and to file an affidavit of Mr Justin Gibb Bates. The factual background which follows is drawn from those affidavits. Much of it does not appear to be in dispute but of course I make no findings about any matters at this stage.
Western Interstate Pty Ltd (in liquidation) (WI) claims to be a creditor of Bell Group Finance (in liquidation) (BGF). It has lodged a proof of debt in the winding up of BGF for more than $750 million. It appears that that figure represents a loan of $434 million to BGF, plus interest on that amount.[1] WI's claim is that it loaned BGF that sum in December 1988 and January 1989. The funds for that loan came from the issue of 43,405 redeemable preference shares in WI to BGUK. In evidence was an extract from WI's accounts, which show an entry for receivables for an amount owed by a related company (which included BGF) in the amount of $478 million.
[1] Affidavit of Angela Hamersley affirmed 10 February 2017, Annexure AH-123, 188.
BGNV is a creditor of BGF. It is a substantial creditor, having been admitted to proof in the winding up for the sum of approximately $394 million. The other substantial creditor of BGF is WI. If BGNV can establish that WI is not a creditor of BGF, then that will be to BGNV's considerable financial advantage in the distribution of funds in the liquidation of BGF.

The Federal Court proceedings

I turn now to the Federal Court proceedings. The Federal Court proceedings were commenced by BGNV against BGF. The liquidator of WI, Mr Woodings, is also a party to those proceedings. (Mr Woodings is the liquidator of both BGF and WI.) ICWA was not joined as a party to the Federal Court proceedings. It has since applied to be joined. That application, which is opposed by BGNV, is listed for hearing at the end of April 2017.
BGUK applied to be joined in the Federal Court proceedings as a defendant. It succeeded in that application.
In the Federal Court proceedings, the Relief sought includes a declaration that WI is not a creditor of BGF, and that WI had no power to issue redeemable preference shares in December 1988 or January 1989. According to BGNV's statement of claim, BGNV says that WI did not issue to BGUK, and BGUK did not acquire, any redeemable preference shares in December 1988 or January 1989, or at all; that BGUK did not pay WI any money as consideration for the purchase of redeemable preference shares at all; that WI did not lend to BGF any monies representing the proceeds of an issue of redeemable preference shares by WI to BGUK; that BGF is not indebted to WI; that WI is not a creditor of BGF; and that WI does not have a debt or claim admissible to proof in the winding up of BGF.[2]
[2] Affidavit of Angela Hamersley affirmed 10 February 2017, Annexure AH-126, 208 ‑ 211.
In the defence it has filed in the Federal Court proceedings, BGUK says it purchased the redeemable preference shares in WI in September 1989. It does not dispute that the purchase of those shares was backdated. It has also admitted that WI had no power to issue redeemable preference shares in December 1988 and January 1989.[3]
[3] Affidavit of Scott Bruce Foreman sworn 14 March 2017, Annexure SBF-20, 178, 184.
I will return to say something more about BGUK's position in the Federal Court proceedings a little later in these reasons.

Principles applicable to the grant of an interlocutory injunction

I turn next to the principles applicable to the Application. As I have already noted, this is an application for an anti-suit injunction. It is appropriate to observe, however, that the genesis for the Application is not a dispute as to whether the Federal Court has jurisdiction to deal with the Federal Court proceedings, or whether those proceedings should have been commenced in this Court instead. In that respect, the application is not one which raises the kinds of considerations which were the subject of the discussion in CSR Ltd v Cigna Insurance Australia Ltd.[4]The outcome of the Application, if a permanent injunction is ultimately granted, will not be that this Court will determine whether to grant the Relief now sought by BGNV in the Federal Court proceedings. Rather, the outcome would simply be that BGNV will not be permitted to continue to pursue the Relief in the Federal Court proceedings at all.[5]
[4] CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345.
[5] See par 30 of ICWA's Minute of Further Amended Writ of Summons dated 14 April 2017 and [6.2] & ff of ICWA's Minute of Amended Statement of Issues, Facts and Contentions.
As I have already observed, the basis for the Application is that ICWA claims that by seeking the Relief in the Federal Court proceedings, BGNV is acting in breach of its contractual obligations, and that it should be restrained from doing so. There is no doubt that this Court has an inherent jurisdiction to restrain a party from bringing proceedings in breach of a contract, wherever those proceedings may be brought.[6] Although an anti-suit injunction operates in personam, the effect of such an order is to interfere with the proceedings in the other court, because a litigant will be restrained from pursuing those proceedings. The authorities emphasise that in cases where the issue is which court is the appropriate forum for the litigation, principles of judicial comity warrant caution in the exercise of the jurisdiction to grant injunctive relief.[7] (That is why the view has sometimes been taken that it is not appropriate or desirable to grant an anti-suit injunction unless the applicant for the injunction has first sought a stay or dismissal of the other proceedings.) However, as I have said, the present case does not involve a question as to whether the Federal Court or this Court is the more appropriate forum for determining BGNV's claims to the Relief. Where no question of the proper forum arises, where the Court in which the injunction is sought clearly has jurisdiction, and where the basis for the application is to enforce a contractual right, I agree with the observation of McDougall J in Great Southern Loans v Locator Group that considerations of judicial comity do not require the Court to 'withhold its hand'.[8]
[6] CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345, 392, and the cases at footnote 115.
[7] CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345, 396.
[8] Great Southern Loans Pty Ltd v Locator Group Pty Ltd [2005] NSWSC 438 [52], citing CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345, 396.
For completeness, however, I should mention that ICWA has made the application in this Court for two reasons. First, as I have mentioned, ICWA is not a party to the Federal Court proceedings. It has applied to be joined as a party, but BGNV has opposed its joinder, other than on a very limited basis. Secondly, the Application is brought in proceedings in this Court which raise for determination numerous issues concerning the distribution of funds in the liquidation of The Bell Group Ltd (in liquidation) (TBGL) and BGF. Because of the flow of funds through companies (themselves in liquidation) within the Bell Group, the distribution of funds in the liquidation of TBGL will encompass funds flowing from Western Interstate.[9] If the Relief which BGNV seeks in the Federal Court proceedings were to be granted, those funds would not flow, and thus would not be available for distribution in the liquidation. That point is at the heart of the Application.
[9] ICWA submissions dated 10 February 2017 [58] ‑ [59].
I turn to the principles applicable to the grant of interlocutory injunctive relief. Those principles are well established. They were recently set out by Newnes JA in Mineralogy Pty Ltd v Sino Iron Pty Ltd where his Honour (with whom Corboy J agreed) said:[10]
The two main enquiries that arise are whether the plaintiff has made out a prima facie case and whether the balance of convenience favours the grant of the injunction. The first inquiry as to a 'prima facie case' does not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed. It is sufficient that the plaintiff show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial. How strong the probability needs to be depends upon the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the orders the plaintiff seeks. The second inquiry is whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs, or is outweighed by, the injury which the defendant would suffer if an injunction was granted: Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618; Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57. Whether an applicant for an interlocutory injunction has made out a sufficient prima facie case and whether the balance of convenience favours the grant of such relief are related, not independent, questions: Warner‑Lambert Co LCC v Apotex Pty Ltd [2014] FCAFC 59 [70].
His Honour also pointed out:[11]
It is clear that on an application for an interlocutory injunction the court does not 'undertake a preliminary trial, and give or withhold interlocutory relief upon a forecast as to the ultimate result of the case': Beecham, 622. But it is necessary for an assessment to be made of the strength of the plaintiff's probability of ultimate success. It is plain from the test described in Beecham and O'Neillthat the plaintiff's probability of success at trial is a critical factor in the determination of such an application. In that respect, as the Full Court of the Federal Court observed in Samsung Electronics Co Ltd v Apple Inc[2011] FCAFC 156; (2011) 217 FCR 238 [59], it is not enough simply to conclude that the plaintiff has a 'prima facie' case. What is required is an assessment or evaluation of the case for the purpose of deciding whether the plaintiff has made out a prima facie case of sufficient strength to justify the grant of an interlocutory injunction and to enable the strength of the case to be taken into account in an assessment of the balance of convenience and justice: Samsung[87] ‑ [88].
[10] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105 [87].
[11] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105 [102].
A further consideration to be taken into account is whether, if the injunction is not granted, the plaintiff will suffer irreparable injury for which damages will not be adequate compensation. As Edelman J observed in National Australia Bank Ltd v Joyce,[12] there has been some controversy over whether the adequacy of damages as an alternative remedy is a factor to be considered as part of the balance of convenience, or as a separate consideration in the overall exercise of discretion whether to grant injunctive relief. In my view, it is more appropriate to consider the adequacy of damages as part of the overall balance of convenience rather than as a stand-alone consideration.[13] However, for present purposes, whether the adequacy of damages is a separate consideration or part of the overall balance of convenience makes little difference.

Whether there exists a serious question to be tried as to whether BGNV's pursuit of the Relief constitutes a breach of contract
[12] National Australia Bank Ltd v Joyce [2012] WASC 224 [38].
[13] See the cases discussed in National Australia Bank Ltd v Joyce [2012] WASC 224 [39] - [40] (Edelman J).

I turn next to whether there is a serious question to be tried. The existence of the implied duties for which ICWA contends centres on three inter‑related agreements: the Western Interstate Inter‑Creditor Agreement dated 6 February 1996 (WIICA); the Western Interstate Assignment Agreement dated 13 March 1996 (WIAA); and the Western Interstate Indemnity Agreement dated 6 March 1996 (WIIA). I will refer to these agreements, collectively, as the WI Agreements. The WI Agreements are clearly inter-related. There are cross‑references in those Agreements to each other. For completeness, I note that the WIAA was subsequently amended, but not in any manner which is of present relevance. In addition I note that in July 1997, the parties entered into an agreement called the Confirmation Agreement by which they confirmed the terms of various agreements including the WIICA.

ICWA places emphasis on the circumstances in which the WI Agreements came to be entered into. It says that those circumstances assist in construing the WI Agreements, and in understanding what it was that they sought to achieve. It is not necessary to detail those circumstances much at this stage, other than to make the following brief remarks.
In 1995, the liquidators of TBGL and BGF wanted to investigate and pursue proceedings against various banks which had security over certain assets of the various Bell Group companies, and used those assets for their own benefit. ICWA, the Law Debenture Trust Corporation (LDTC), BGNV and the Commonwealth (collectively, the Indemnifying Creditors) agreed to provide funding to the liquidators to commence proceedings in CIV 1464 of 2000 in this Court (the Bell Proceedings). They entered into various agreements for that purpose, including agreements to pool and distribute the monies recovered in the Bell Proceedings in various ratios.
Various Bell Group subsidiary companies had to be joined as plaintiffs in the Bell Proceedings. They included WI and Bell Bros Pty Ltd (in liquidation) (Bell Bros). Those companies owed the Commonwealth significant tax debts. The Indemnifying Creditors understood that those tax debts could affect the returns available for the Indemnifying Creditors because the ATO would first be paid out of any money recovered. There was disagreement about how to deal with that problem.
WI's share capital at the time was 95,000 ordinary shares, which were held by Bell Bros, and 43,405 redeemable preference shares which had been issued at a very considerable premium per share, over and above the ordinary share price. [SUPPRESSED] If that were the case, then the benefit of any money received by WI as a result of the Bell Proceedings, would flow to the ordinary shareholder.
The Indemnifying Creditors then reached an agreement that the liquidator of Bell Bros would assign 57,000 of the ordinary shares in WI, which it held, to the liquidator of BGF. (The transfer of those shares was treated as the consideration paid by the liquidator of Bell Bros for the indemnifying creditors to fund the Bell Proceedings.) It was agreed that the liquidator of BGF would hold those shares on trust for the Indemnifying Creditors in accordance with the agreed ratios, and that the Commonwealth, as a creditor of Bell Bros, would vote in favour of that assignment.
It was to put that arrangement into place that the Indemnifying Creditors entered into the WI Agreements in February and March 1996.

Overview of the WI Agreements

I now intend to give a brief overview of the WI Agreements. I turn first to the WIAA. The parties to the WIAA were Mr Totterdell, as the liquidator of Bell Bros (the BB Liquidator), Mr Woodings as the liquidator of WI, the Commonwealth, the LDTC, the SGIC (now ICWA) and BGNV.
The WIAA dealt with: the transfer of the WI ordinary shares from Bell Bros to the liquidator of BGF, and the latter's agreement to hold those shares on trust for the Indemnifying Creditors; the consent of the Commonwealth to that assignment of shares; the BB Liquidator's investigations, including examinations under the Corporations Law; and his commencement of proceedings; and the Indemnifying Creditors' obligations to indemnify the BB Liquidator.
The Recitals to the WIAA included Recital G, which provided that 'if the claims of Bell Bros are successful the sole or primary beneficiary of that action would be the Commonwealth by reason of the receipt of dividends from Bell Bros' and Recital H, which provided that '[i]n the circumstances, the current Indemnifiers have informed the [BB] Liquidator that they are only willing to fund the [BB] Liquidator to undertake the Examination and Proceedings provided arrangements are made to secure a benefit to the body of the Indemnifiers from such funding'.
Recital K noted that the parties had a genuine and substantial commercial interest in entering into the WIAA.
I turn next to the WIIA. The parties to the WIIA were Mr Woodings as the liquidator of WI, the Commonwealth, the LDTC, the SGIC (now ICWA) and BGNV. The WIIA set out the obligations of the Indemnifying Creditors (referred to as the Indemnifiers) to indemnify Mr Woodings for his investigations, including in relation to the conduct of examinations under the Corporations Law, and the commencement of proceedings; an obligation on the liquidator to have regard to the resolutions of the Indemnifiers in relation to the conduct of the examinations and any proceedings; and the parties' agreement to the ratios by which the obligations of the Indemnifiers would be borne.
Finally, and perhaps most importantly, I turn to the WIICA. The parties to the WIICA were the Indemnifying Creditors. The WIICA dealt with the allocation of any recovery made pursuant to the proceedings which may be commenced by the liquidators of, amongst others, Bell Bros and WI (Recital B). It also dealt with the situation in the event that one of the Indemnifying Creditors decided not to continue funding under the WI Agreements, in which case the Indemnifying Creditor would become a 'Terminating Indemnifier' and the other Indemnifying Creditors would assume the Terminating Indemnifier's obligations and rights in respect of the Pooled Funds (see cl 6.2 and cl 10).
Clause 4 of the WIICA referred to the obligations (by reference to specified ratios) of the parties to the WIICA under the Indemnity Agreements between them and the liquidators of Bell Group companies, including Bell Bros and WI, for the purpose of funding the liquidators' investigations and commencement of proceedings.
Clause 5.1 of the WIICA then set out the parties' obligation to ensure that what were referred to as the 'Pooled Funds' were distributed in a particular ratio. 'Pooled Funds' were defined to mean 'any moneys in the nature of return of capital in respect of the shares in [WI] held in trust by BGF for the Commonwealth, SGIC and BGNV, and any Settlement Funds'. (For completeness I note that the term 'Settlement Funds' was defined to mean 'any consideration payable to any of the parties ... in consideration of or as an inducement to their discontinuing any indemnity under the Indemnity Agreements').
Finally, cl 15 of the WIICA contained an express obligation that the parties 'will do all acts and things to give effect to this Agreement'.

The implied terms for which ICWA contends

ICWA contends that there are two terms which are implied into the WIICA, namely a term obliging the parties to co‑operate to secure a benefit for which the agreement provides (duty of co‑operation) and a term requiring the parties to refrain from acting so as to destroy the fruits of the agreement (duty of good faith).[14]
[14] ICWA submissions dated 10 February 2017 [33].
ICWA says that the duty of co-operation is 'an implied contractual term requiring the parties to that agreement to co‑operate in securing the benefit of that agreement and to not act so as to hinder or prevent that benefit from being secured'.[15]
[15] ICWA submissions dated 10 February 2017 [35].
The duty of good faith is formulated as 'an implied contractual term of good faith which obliges BGNV (and the other contracting parties) to refrain from acting so as to destroy the fruits of that agreement.'[16]
[16] ICWA submissions dated 10 February 2017 [42].
ICWA submits that the implied duty of good faith substantially mirrors and complements the implied duty to co-operate.

Principles in relation to implication of a duty of co-operation

I will now make some observations on the principles in relation to the implication of a duty of co‑operation.
It is recognised that a duty to co-operate is able to apply to contracts generally. In Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd, Mason J observed:[17]
It is common ground that the contract imposed an implied obligation on each party to do all that was reasonably necessary to secure performance of the contract. As Lord Blackburn said in Mackay v Dick:
as a general rule … where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agreed to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect.
It is not to be thought that this rule of construction is confined to the imposition of an obligation on one contracting party to cooperate in doing all that is necessary to be done for the performance by the other party of his obligations under the contract. As Griffith CJ said in Butt v M'Donald:
It is a general rule applicable to every contract that each party agreed, by implication, to do all such things as are necessary on his part to enable the other party to have the benefit of the contract.
It is easy to imply a duty to co-operate in the doing of acts which are necessary to the performance by the parties or by one of the parties of fundamental obligations under the contract. It is not quite so easy to make the implication when the acts in question are necessary to entitle the other contracting party to a benefit under the contract but are not essential to the performance of that party's obligations and are not fundamental to the contract. Then the question arises whether the contract imposes a duty to co-operate on the first party or whether it leaves him at liberty to decide for himself whether the acts shall be done, even if the consequence of his decision is to disentitle the other party to a benefit. In such a case, the correct interpretation of the contract depends, as it seems to me, not so much on the application of the general rule of construction as on the intention of the parties as manifested by the contract itself.
[17] Secured IncomeReal Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596, 607.
As his Honour noted, the first kind of duty to co-operate is that which is implied by necessity to all contracts which require performance of an obligation which depends upon the parties' co-operation to be performed. More recently, in Commonwealth Bank of Australia vBarker, French CJ, Bell and Keane JJ held:[18]
The duty to cooperate…applies to contracts generally. That duty is directly related to contractual performance, which explains to some degree why it can arguably be characterised as a rule of construction.
[18] Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 [37].
However, as Mason J observed in Secured Income, if the co‑operation of the parties is not necessary to achieve the express terms of the contract, a question will arise as to the parties' intention. In other words, a duty to co‑operate would have to be implied, in fact, in the particular case.
Consistent with that approach, the duty to co-operate does not amount to a general duty to ensure that another party obtains an anticipated benefit under the contract. In Wolfe v Permanent Custodians, the Court held that:[19]
Although the duty to cooperate is broadly stated in Butt v McDonald, the scope of the duty is defined by what has been promised under the contract; it is not a general duty to ensure another party obtains an anticipated benefit.
[19] Wolfe v Permanent Custodians Ltd [2013] VSCA 331 [28].
Similarly, in Jackson Nominees, McMurdo J held:[20]
[In Secured Income Real Estate] Mason J…distinguished between acts according to whether they are necessary to the performance of a party's fundamental obligations under the contract. There is a duty to co-operate in the doing of acts which are necessary to the performance of such obligations. But a duty to co-operate in the doing of acts which are not necessary to the performance of fundamental obligations has to be found in 'the intention of the parties as manifested by the contract itself', that is by a term implied in fact.
[20] Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd [2006] QCA 126 [51].
Where the implied term is said to be concerned with the enjoyment of rights conferred by the contract ‑ a case of an implied duty to co‑operate of the second kind contemplated by Mason J in Secured Income ‑ then the implication of a duty of co-operation will depend on the parties' intention, as manifested in the contract. As Barrett AJA (with whom McColl JA and Sackville AJA agreed) explained in WIN Corporation v Nine Network:[21]
The implied term now under consideration is concerned with the enjoyment of the rights conferred by the contract. The nature and scope of those rights must therefore be determined before any attempt is made to assess the impact of the implied term and the duty it imposes. In that respect, I would respectfully endorse the following statement by McMurdo J (as his Honour then was) in Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd [2006] QCA 126 at [51]:
To assess the scope of the duty in a particular case, it is first necessary to define the relevant obligations, and in particular, to define the circumstances in which the parties have agreed that a certain obligation must be performed. It is not a duty upon one party to act so as to enhance the commercial value to the other party of the contract.
[21] WIN Corporation Pty Ltd v Nine Network Australia Pty Ltd [2016] NSWCA 297 [71].
As the authorities demonstrate, it is not easy for a litigant to establish a positive duty to do something which, in a merely general sense, will enable the benefit of the contract to be enjoyed. Such a case would face the problem that a duty to co‑operate is not a general duty to ensure that another party obtains an anticipated benefit from the contract.
However, in my view, there is room for argument that the same conclusion does not follow in relation to the implication of a negative covenant ‑ a duty not to do something which will undermine the substance of the bargain itself or which would prevent the benefit of the contract from being secured.
It has always been recognised that the implied duty of co-operation can import a negative covenant. That much was established in Stirling v Maitland,[22] which was summarised in Australis Media Holdings as follows:[23]
[A]n insurance company covenanted with the plaintiff (Stirling) that he should be appointed its agent in Glasgow, together with a co-agent Seton. The company promised that if it should at any time "displace" Seton from his appointment, then it would pay a sum of money to the plaintiff. Seton was "displaced" in consequence of the company having voluntarily transferred its business to another company. The conduct of the defendant was held to be a breach of the express covenant because it involved the voluntary act of the defendant which put an end to the state of affairs under which alone the covenant would operate. In the course of his judgment Cockburn CJ stated (at 1047) a general principle that:
… if a party enters into an arrangement which can only take effect by the continuance of a certain existing state of circumstances, there is an implied engagement on his part that he shall do nothing of his own motion to put an end to that state of circumstances, under which alone the arrangement can be operative.
[22] Stirling v Maitland & Boyd (1864) 122 ER 1043.
[23] Australis Media Holdings Pty Ltd v Telstra Corporation Ltd; Australis Media Holdings Pty Ltd v News Corporation Ltd (1998) 43 NSWLR 104, 123.
Further, in Shepherd v Felt and Textiles, Dixon J said:[24]
The express promise of the appellant to use his best endeavours to obtain orders for the respondents, and to influence business on their behalf, necessarily includes an obligation not to hinder or prevent the fulfilment of its purpose. Moreover, the contract established a relation between the parties intended to subsist for a period, and it involved some degree of mutual confidence and required a continual cooperation. Its object was the increase of the sale of the respondents' manufactures, and to that end the extension of the respondents' business connection. Such an agreement inevitably imported a tacit condition that the appellant should perform the services faithfully which he contracted to give the respondents, and should not endeavour to impede or defeat the respondents in the sale of their manufactures at the prices they might think proper to ask.
[24] Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21; (1931) 45 CLR 359, 378.
Finally, Peters (WA) Ltd v Petersville Ltd,[25] Gleeson CJ, Gummow, Kirby and Hayne JJ observed,
The law already implies an obligation by the respondents to do all such things as are necessary on their part to enable Peters WA to have the benefit of those licence arrangements. It is not now necessary to consider the basis of the implication. The law also implies a negative covenant not to hinder or prevent the fulfilment of the purpose of the express promise made in [the contract].
[25] Peters (WA) Ltd v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126, 142 [36] (Gleeson CJ, Gummow, Kirby & Hayne JJ).
The clearest example, perhaps, of such an implied negative covenant can be seen in the case of Rectron Australia BV v Lu,[26] which concerned a Deed of Settlement which contained a clause releasing the plaintiffs from claims relating to proceedings in Victoria. The defendant subsequently commenced proceedings against the plaintiff in Taiwan. The maintenance of those proceedings was said to be a breach of the obligations arising from the grant of the release. Lindsay J held:[27]
That grant carries with it an implied contractual obligation on the part of the defendant, as releaser, in the nature of an obligation not to derogate from his grant of an entitlement to a release (to use the language of property law) or (to use the language of contract law) not to do anything to hinder or prevent the fulfilment of the purpose of the release or to destroy the efficacy of the bargain he made with the first plaintiff. (citations omitted)
It may not be correct, generally, to describe a grant of a release of rights as carrying with it, in every case, an implied obligation analogous to an implied "covenant (by the releasor) not to sue (a releasee)" but, on the proper construction of the Deed of Settlement as a whole, it is in this case an implied, negative contractual stipulation substantially to the same effect.
Viewed objectively, the contractual intent of the parties to the Deed of Settlement (including both the first plaintiff and the defendant) was that all proceedings between them (within the scope of the mutual, reciprocal releases contained in clauses 21 and 22 of the Deed of Settlement) would be 'unconditionally and irrevocably' brought to an end so that they could, respectively, enjoy the benefits of [the] commercial settlement ... .
[26] Rectron Australia BV v Lu [2014] NSWSC 1367.
[27] Rectron Australia BV v Lu [2014] NSWSC 1367 [54] ‑ [56].
In Service Station Association v Berg Bennett &Associates,[28] Gummow J referred to Wigand v Bachmann-Bechtel as an example of the implied negative covenant:[29]
A promise by a defendant to sell to the plaintiff all of a particular commodity produced at its factory did not entitle the defendant to escape breach by discontinuing production; it was obliged for the life of the contract to continue production "in good faith".
[28] Service Station Association Ltd v Berg Bennett & Associates Pty Ltd (1993) 45 FCR 84, 94.
[29] Wigand v Bachmann‑Bechtel Brewing Co (1918) 118 NE 618.
Marmax Investments provides a further example of the implied negative covenant, in the context of a dispute over an alleged breach of a franchise agreement. In that case, the Full Federal Court held:[30]
In our view, the content of the obligation to do all things necessary to give the other party the benefit of the contract required Spanline to refrain from taking positive steps that would infringe upon or cause a third party to infringe upon the exclusive franchise granted to RPR. To require Spanline to do more, such as to take positive steps to investigate possible incursions by Marmax upon the rights of RPR, would exceed the requirement of necessity.
[30] Marmax Investments Pty Ltd v RPR Maintenance Pty Ltd [2015] FCAFC 127; (2015) 237 FCR 534, 561 [139].

The question for the Court in any particular case will be to identify what it is that the contract requires in terms of obligations to be performed, and what objective the contract is intended to achieve. A party will be under an implied duty not to hamper or hinder the other's performance of a contractual obligation, and not to hamper or hinder the fulfilment of the purpose of the contract.

Principles in relation to duty of good faith

Turning more briefly to the principles in relation to the duty of good faith, there has been debate in relation to whether a duty of good faith will be implied in all commercial contracts. But as ICWA points out,[31] the courts have been willing to imply such a duty in contracts for joint ventures or partnerships where there is a need for a high degree of co‑operation and reliance by all the parties on the good faith of each other party, particularly in the context of their working together to achieve a common objective.[32]
[31] ICWA submissions dated 10 February 2017 [43].
[32] See, for example, Tote Tasmania Pty Ltd v Garrott [2008] TASSC 86; (2008) 17 Tas R 320 [17]; Alstom Ltd v Yokogawa Australia Pty Ltd (No 7) [2012] SASC 49 [597].
Given the close relationship of the Indemnifying Creditors and of the parties to the WI Agreements, there is an argument that this is the kind of case where a duty of good faith may be more readily implied.
There is clearly a close relationship between the duty of co-operation and the duty of good faith. One of the manifestations of the duty of good faith is an obligation not to act to undermine the bargain entered or the substance of the contractual benefit bargained for.[33]
[33] See, for example, Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 [12] (Allsop P).
Given the close relationship between these duties, I will refer to the implied duties in this case as one and the same Implied Duty, by which I mean to refer to a duty on the parties to co‑operate in securing the benefit of the agreement and not to act so as to hinder or prevent that benefit from being secured or so as to destroy the fruits of the agreement.

Is there a serious question to be tried?

In my view, ICWA has established that there exists a serious question to be tried. It has done so because, first, the claim that it makes is known to the law. That is, the law recognises the existence of both kinds of implied duties, including their manifestation as a negative covenant. There can also be no doubt that if the Implied Duty applies to BGNV, then it has acted in breach of that duty by commencing the Federal Court proceedings and continuing to pursue those proceedings. However, the area of dispute is whether the WI Agreements permit the implication of the Implied Duty in the first place. In my view, ICWA has made out a serious question to be tried on the existence of the Implied Duty here, founded on the express clauses of the WIICA to which I have referred, but drawing on all of the WI Agreements as encompassing the entirety of the arrangement between the Indemnifying Creditors and the liquidators.
Five points can be made about these terms of the WIICA which support the conclusion that ICWA has established that there is a serious question to be tried.
First, the obligation in cl 15 to do all acts and things necessary to give effect to the Agreement is arguably an express obligation to do what is necessary to bring the terms of the agreement to fruition.
Secondly, the primary object of the definition of 'Pooled Funds' clearly was moneys in the nature of the return of capital in respect of the ordinary shares held on trust for the Indemnifying Creditors. There is clearly an argument that the reference to the return of capital on those shares embodied the parties' assumption that there would be a flow of capital arising from the manner in which the redeemable preference shares would be dealt with.
Thirdly, the parties' express obligation in cl 5.1 was to 'ensure' that the Pooled Funds were distributed in the prescribed ratios. In my view, it is arguable that each party, including BGNV, is obliged not to do something which would destroy or undermine the existence of the Pooled Funds. If BGNV is able to challenge the very basis on which the Pooled Funds were anticipated to become available for distribution, it would do just that.
Fourthly, there is a further point, which is more closely aligned with the precise obligation on the parties under cl 5.1, which in my view supports the existence of a serious question to be tried. As I have said, the obligation in cl 5.1 is for the parties to 'ensure' that the Pooled Funds are distributed in the prescribed ratios. It will be necessary, in due course, to construe that term in its context, but in doing so one question which will arise is how the Indemnifying Creditors themselves could 'ensure' the distribution of funds in any particular way. In other words, the contractual term is not simply that the Pooled Funds will be distributed in accordance with particular ratios, but that the parties themselves have to 'ensure' that that is done. That obligation is imposed only on the Indemnifying Creditors and not on the liquidator for WI (because the liquidator is not a party to the WIICA), and the obligation is imposed in a context where it would be the liquidator for WI to effect a distribution of any amount recovered in the liquidation.
Whatever any positive obligation arising from cl 5.1 of the WIICA might be, in my view, there is a serious question to be tried as to whether that particular obligation carries a negative covenant for a party not to take action which would have the result that the distribution of the Pooled Funds in the manner contemplate could not be 'ensured'.
Fifthly, the clear assumption of the parties to the WI Agreements was that [SUPPRESSED]. The parties clearly were aware that there was a risk that that might not occur. They nevertheless proceeded with the arrangement achieved by the WI Agreements. That was a commercial decision for them. That does not preclude the existence of an implied duty not to seek to prevent that assumption from coming to fruition. There is a considerable difference in proceeding with an arrangement, acknowledging a risk that a third party might take steps to challenge the assumption underlying the arrangement, and proceeding with an arrangement on the basis that one of the parties to the arrangement itself could seek to challenge the assumption underlying it. There is a strong argument that the Implied Duty exists to exclude the one risk that each of the parties could control, namely that one of their own number might challenge that assumption.
In my view, there is a serious question to be tried that if the Implied Duty exists, BGNV's conduct in commencing and continuing the Federal Court proceedings is a breach of that implied obligation. If the relief is granted, so that WI is not a creditor of BGF, then it will not receive the anticipated distribution which can be passed onto the shareholders by way of a return of capital (as it has virtually no other creditors[34]). The ordinary shares in WI which are held on trust for the Indemnifying Creditors will therefore be worth little, and the Indemnifying Creditors will not receive the very benefit which it was the purpose of the WIICA, in conjunction with the WIIA and the WIAA, to achieve.
[34] Affidavit of Angela Hamersley affirmed 10 February 2017, Annexure AH-124.
In this respect, I should mention that ICWA submits that the background to the parties' entry into the WI Agreements demonstrates that[35]
[A] clear approach was adopted during the course of the negotiation of the WI agreements. The Indemnifying Creditors (including BGNV) were motivated by a desire to ensure that they were able to reap a return from providing funding for the proceedings, including in respect of WI. … It was necessary to put in place appropriate arrangements to ensure that a return flowed to all of the Indemnifying Creditors and not just the ATO. The mechanism that was used to effect that purpose was the holding of ordinary shares in WI on trust for the Indemnifying Creditors. The contemplated return of capital in respect of WI was designed to ensure that the return in fact flowed to the Indemnifying Creditors.
[35] ICWA submissions dated 10 February 2017 [22].
As I have noted, the recitals to the WI Agreements make reference to this factual background. I refer to that submission at this stage simply to highlight the fact that ICWA submitted that it informed the construction of the WI Agreements. But quite apart from that basis, I would have reached the view that I have already expressed that there is a serious question to be tried on the existence of the Implied Duty on the basis of the terms of the WI Agreements themselves.
I should mention one further matter at this stage, which is that an argument was advanced by counsel for BGNV that an implied term of the kind advanced by ICWA would be void for uncertainty. I am not persuaded that if there is an argument as to uncertainty in the Implied Duty, that that is sufficient to warrant the refusal of relief at an interlocutory injunction stage.

Assessment of the Strength of ICWA's case

I turn to make some observations in relation to the strength of ICWA's case. The case ICWA seeks to advance is not an easy one. The conclusion I have reached, that ICWA has made out a serious question to be tried, should not be understood as a conclusion that it will necessarily succeed in an application for final relief. The cases to which I have referred demonstrate amply that reliance on implied terms is generally a difficult path for a litigant.
Clearly, ICWA's case would no doubt be much more straightforward if it could point to a particular express term, the performance of which would be directly prevented by the commencement of the Federal Court proceedings.[36]
[36] As was the case, for example, in Rectron Australia BV v Lu [2014] NSWSC 1367 [54] ‑ [56].
ICWA does not rely on precisely that kind of point. Instead, its case is that the Implied Duty extends to not undermining the very purpose of the WI Agreements.
Nevertheless, despite those kinds of difficulties facing ICWA, I am not persuaded that it can be said that its prospects are hopeless, as counsel for BGNV would have me accept. ICWA does not need to show, at this stage, that it would necessarily succeed.
Having carefully considered the issue, for present purposes, I am of the view that, at best, ICWA has only fair prospects of success, having regard to the arguments that I have heard so far and to what was a relatively brief recitation of those arguments, at least by ICWA's counsel, for the purposes of the Application.

Balance of convenience considerations

I turn to balance of convenience considerations. In a case of the present kind where, as I have said, I regard ICWA's case as having only fair prospects of success, balance of convenience considerations loom large in the overall success of the Application. I turn first to whether ICWA will suffer irreparable harm if the interlocutory injunction is not granted.

Whether ICWA will suffer irreparable harm if the interlocutory injunction is not granted

Clearly ICWA will suffer some harm if the injunction is not granted. It is not a party to the Federal Court proceedings. It has no guaranteed opportunity in those proceedings to be able to advance an argument of the present kind. If BGNV is permitted to proceed with the Federal Court proceedings, ICWA will be exposed to the risk that the very basis on which the WI Agreements were founded would be eliminated. If the Federal Court proceedings were successful, ICWA would suffer the loss of the benefit that the WI Agreements were intended to bring, when it has complied with its obligations in so far as they concerned the indemnification of the liquidators in the Bell Proceedings.

Whether damages would be an adequate alternative remedy

I turn to the question whether damages would be an adequate alternative remedy. The present Application concerns the vindication of a contractual right. It is often difficult to quantify the value of the vindication of rights of the kind involved here. That is especially the case when what is in question is whether a party should be permitted to pursue litigation in another court.
If the question whether damages are an adequate alternative remedy extends to damages arising if the Relief in the Federal Court were to be granted, then there would be potentially a very considerable question as to damages. In that respect, BGNV is a company in liquidation. There was no evidence as to whether it would be in a position to meet a claim for damages of that kind of magnitude, if an injunction is not granted. It cannot be assumed that it would. It suffices to say that I am satisfied that damages are not an adequate alternative remedy here.

Whether an interlocutory injunction is necessary to preserve the status quo

There is a further matter that I should deal with at this point, which is whether an interlocutory injunction is necessary to preserve the status quo. It was argued that the grant of the injunction would have that effect. I am satisfied that an interlocutory injunction is necessary to preserve the status quo. Until BGNV commenced the Federal Court proceedings, the Indemnifying Creditors had all conducted themselves on the basis that the anticipated return of capital, arising from the position with respect to the redeemable preference shares, would be maintained. Apart from BGNV, no other party (including BGUK) presently appears to be minded to suggest that the redeemable preference share transaction was void. The grant of an interlocutory injunction would ensure that that status quo continues, unaffected by legal proceedings.

Whether the grant of an interlocutory injunction will result in unacceptable delay

Counsel for BGNV submitted that if the interlocutory injunction were granted, the final determination of whether a permanent injunction should be granted would need to await the determination of the entirety of the action in CIV 2666 of 2016. There are two reasons why that submission cannot be given much weight. First, it seems to me that there may be scope to determine the question whether an injunction should be granted on a final basis well in advance of the balance of the issues in CIV 2666 of 2016. It is a discrete issue which seems likely to be able to be determined with a relatively confined further hearing. The Court could accommodate that hearing before the end of the year. I intend to require the parties to confer about that possibility, and prepare a timetable for that purpose.
Secondly, BGNV's concerns regarding further delay must be viewed in the context of a proof of debt which is many years old, and where the issues that BGNV now wishes to agitate in the Federal Court proceedings have been known for many years (since the WI Agreements were entered into), and in circumstances where it appears BGNV contemplated bringing proceedings in the Federal Court for about two years prior to when it in fact commenced those proceedings.
Furthermore, this is not a case where it was suggested that evidence would be destroyed or would deteriorate, or that there would be a similar kind of prejudice arising from a delay in the resolution of the Federal Court proceedings.
BGNV also advanced the submission that the pleadings in the Federal Court proceedings have closed. That appeared to be a submission intended to advance the point that the Federal Court proceedings were well on their way to resolution and are not in their infancy. I am unable to accept that submission. BGUK has not yet finalised its defence. And the Federal Court, as I have mentioned, has listed an application by ICWA to be joined as a party to the Federal Court proceedings. If that application were successful, an exchange of pleadings would be required, no doubt followed by the usual pre‑trial steps.
The upshot of all of that is that I do not consider that the Federal Court proceedings are at such an advanced stage to alter the consideration of the balance of convenience for present purposes.

Other prejudice to BGNV

The only other prejudice that counsel for BGNV was able to point to at this stage was that his client had expended costs ‑ said to be considerable costs ‑ in preparing the Federal Court proceedings. No figure was put on those costs. Claims of this kind need to be kept in perspective. The implications of the dispute between the parties in the present action, and the implications of the Federal Court proceedings, are of a magnitude of millions of dollars. Any costs incurred by BGNV in commencing and pursuing the Federal Court proceedings thus far is likely to be in the thousands of dollars. That prejudice does not strongly militate against the grant of relief.

The position of BGUK

I turn to the position of BGUK in relation to the question of balance of convenience. As I have said, BGUK is the holder of the redeemable preference shares in WI and is a defendant in the Federal Court proceedings.
BGUK's position is that it is defending the claims for relief made by BGNV, and it has a cross‑claim in which it seeks a declaration that BGUK is a creditor of BGF. Its position, as I understand it, is that even if the redeemable preference share transaction is void, nevertheless BGUK is a creditor of BGF as it advanced funds to BGF in December 1988 and May and June 1989, and if the transaction failed, then it has received no consideration for the advance of its funds, and is entitled to the return of the money. I gathered, from BGUK's submissions, that its cross‑claim is solely responsive to the claims for Relief by BGNV. That is, the claim will be pursued only in the event that the share transaction was held to be void.
In that respect, I do not see any basis for a claim to prejudice by BGUK as a result of the grant of injunctive relief against BGNV, save for the fact that it has incurred costs in the Federal Court proceedings. But if BGNV is permanently injuncted from pursuing those proceedings, I do not see why BGUK's costs will not follow the event of the Federal Court proceedings being dismissed (as they would need to be). On the other hand, if an injunction is not permanently granted, then BGUK's costs will not have been thrown away at all.
BGUK's position therefore does not militate against the grant of interlocutory injunctive relief as a balance of convenience consideration.
In conclusion, in respect of the balance of convenience, I am of the view that balance of convenience considerations strongly support the grant of interlocutory injunctive relief in this case.
There were some other considerations identified by counsel for BGNV which, in his submission, warranted the court refusing the relief sought in the exercise of its discretion. I turn to deal with those now.

Other considerations relevant to the exercise of the discretion to grant interlocutory injunctive relief

Delay

The grant of injunctive relief, whether interim or final, is discretionary. Delay by an applicant in instituting or in prosecuting a claim for an injunction may be a ground for refusing relief. Delay is an important discretionary consideration in relation to an interim injunction.[37] But it is one factor to consider along with all other factors relevant to the exercise of the Court's discretion. In a case involving a very lengthy delay, with few, or no, compelling balance of convenience considerations to the contrary, then injunctive relief may be refused. But in my view, this is not a case of that kind.
[37] Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 76 ALR 633, 638.
The Federal Court proceedings were commenced in May 2016. The Application was filed in December 2016, some seven months later.

BGNV claims that initially ICWA's position was that it wanted to participate in the Federal Court proceedings and to oppose the relief sought, including on the merits, but that since then its position has been ambivalent and that it has vacillated between wanting to participate in the Federal Court proceedings, wanting those proceedings to be transferred to this Court, and wanting to pursue the Application.
I do not accept that that is a fair characterisation of what has occurred, having regard to the correspondence annexed to the affidavits before the Court. It is clear from that correspondence that ICWA has sought to express its concerns to BGNV since it first became aware that BGNV was contemplating taking action of the kind it has pursued in the Federal Court proceedings.
If there was, in truth, any delay here, it was short-lived. ICWA clearly expressed its concerns to BGNV about its intention to pursue the Federal Court proceedings in advance of those proceedings being commenced. I see no room for criticism of its decision to wait and see if BGNV actually commenced the Federal Court proceedings. If those proceedings had been commenced and ICWA had been named as a defendant, then that would no doubt have had a bearing on the question of whether ICWA's application for injunctive relief should be made in the Federal Court or this Court. Further, to bring an application for an injunction in advance of the Federal Court proceedings being commenced, when there was a prospect that BGNV might not commence those proceedings in view of ICWA's concerns, would be to risk wasting the time and resources of the Court and the litigants. ICWA's delay in bringing the Application is not a consideration warranting refusal of the grant of relief.

Acquiescence

Acquiescence by ICWA was also said to be a discretionary consideration which would support the Court declining to grant the relief sought by ICWA. For the reasons I have already indicated in relation to delay, I do not regard ICWA's conduct as in any way manifesting acquiescence in the course of conduct taken by BGNV in commencing the Federal Court proceedings. Acquiescence is not a consideration in my view warranting refusal of the grant of relief at this stage.

Clean Hands

BGNV advanced the submission that ICWA did not come to the Court with clean hands. Nothing in the material relied upon by counsel for BGNV has persuaded me that ICWA makes the Application with unclean hands. I do not regard ICWA's conduct as warranting the refusal of injunctive relief on discretionary grounds.

Whether the implied term is contrary to public policy

Finally, an argument was advanced by counsel for BGNV that the implication in the WIICA of the Implied Duty would be contrary to public policy because it would interfere with the obligations on the Liquidator of BGNV to conduct the liquidation of that company.[38] In my view, the argument that the Implied Duty is contrary to public policy adds to the existence of a serious question to be tried, rather than counts as a discretionary factor militating against the grant of injunctive relief at this stage.

Conclusion: Overall evaluation of the question whether a basis for the grant of an interlocutory injunction has been made out
[38] See BGNV's Written Submissions dated 14 March 2017 [200] ‑ [209].

Let me conclude by making an overall evaluation of the question of whether a basis for the grant of interlocutory injunction has been made out.
Although my preliminary view for the purposes of the Application at this stage is that ICWA has only fair prospects of success in establishing that the commencement and prosecution of the claims for Relief in the Federal Court proceedings constitute a breach of the Implied Duty, the balance of convenience weighs strongly, in my view, in favour of the grant of an interlocutory injunction. That is particularly so in circumstances where the question of final injunctive relief is ripe for consideration as a separate issue, in advance of the trial of the remaining issues in CIV 2666 of 2016.
Taking into account the overall balance of convenience, I am satisfied that an interlocutory injunction should issue and that the discretionary factors raised by BGNV do not warrant the Court refusing the grant of interlocutory injunctive relief.
Accordingly, I will make orders restraining BGNV from continuing to prosecute its claims for the Relief in the Federal Court proceedings, pending further order of this Court.

Postscript

In the course of the hearing, I made orders to suppress certain material which was before the Court and which the parties agreed was confidential, or subject to a claim to legal professional privilege (confidential matter). These reasons contain two references to such confidential matter. After hearing from the parties I have decided to publish these reasons, but to suppress, by redaction, those two references to confidential matter. I have done so in order to respect, to the greatest extent possible, the principle of open justice,[39] but without undermining the claim of confidentiality and privilege which has been made in respect of the confidential matter.
[39] See McJannett v Daley [No 2] [2012] WASC 386 (S) [3] ‑ [4] (Le Miere J).